With the opening of competition in Europe, the battle is raging in all sectors of activity. The banking sector is no exception to this trend. Between commercial banks, investment banks and neobanks, the offer is dense. We will try to see more clearly so that you can choose your bank with complete peace of mind.
Business and the banks
A bank must be the partner of your success. It must accompany you and offer services that will allow your company to grow.
Over the last five years, we can see the arrival of new banking players throughout UK. The neobanks. These are new generation banks between bank and startup. They base their offer on simple and effective online services, and are resolutely forward-looking.
Before discovering the best UK neobanks, it is necessary to consider the reasons why you need to open a professional bank account.
Why you should have a business bank account ?
There would be dozens of reasons why you should open a business account.
Let’s see the most important and the most basic :
To be credible, Paying purchases or receiving payments on a personal account sends bad signals. It’s about your credibility and your professionalism to have an account to manage your business.
Accounting facility. You will facilitate the accounting, and the calculation of taxes, when the time comes.
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What kind of business bank to choose?
Before choosing a bank you must define the banking services you need.
It is obvious that a multinational and a freelancer do not have the same expectations nor the same requirements.
The nature and the field of activity, will impact your choice.
For example an e-commerce will need online services and an online payment system …
A dealer business will need a terminal of payment.
Do you want a bank with a physical branch or do you only use mobile app to manage all ?
If you are a merchant, and receive large cash amount, you’ll have to make deposits and will look for traditional banks with local branches.
Do you need loan or Investments advices ?
It would be a shame to pay for banking services that are not suited to your business, or simply useless.
What are Neobanks ?
Neobanks are particularly suitable for SMEs, freelances or online businesses.
They offer services designed to simplify the task of managers.
They are aimed at people with limited time to manage a bank account, and wanting simple, effective and reliable services.
Differences between Neobanks and classical banks
Neobanks are financial technology firms (Fintech). They are fully digital and most offer a mobile app to use their services.
These applications are focused on design and user experience. Many features allow you to customize the services according to your needs.
You will find in these applications syntheses of your accounts very useful.
Possibility to give debit cards or prepayed mastercard to your employees. Often there are options for transferring data to an accounting software.
And other services that you would find in traditional banks :
- Payment and money transfer services
- Loans for businesses
- Other services, including budgeting help and more
Unlike traditional banks, neobanks doesn’t have any branches. Everything is managed remotely.
So people who need to make cash or check deposit, who need financial and investments advices, should choose a traditional bank or a local bank, with local branches.
It is much more difficult to be accepted into a traditional bank, which has much more selective entry criteria.
Advantages of neobanks :
- An account can be opened very easely and quickly. The process can be done on phone or through computer. It is very smooth and user-friendly.
- You will get a free debit card. This debit card can be managed in mobile app. You can change pin, freeze the card or raise the payment ceiling.
- User-friendly and responsive interface.
- Updated flows. All transactions and payments appear in real-time directly in the app.
- Overview of your expenses. You can easily manage them in your mobile app.
Biggest neobanks in UK
If we check the numbers, the largest market is the English market with 4 million users, followed by France with 1.8 million users, Spain with 600,000 users. Then Germany and Poland are tied with 380,000 users.
Neobanks have only been around for a few years, but they are growing rapidly. They try to satisfy customers to attract them, where traditional banks are only looking for customers.
We only show you the most famous actors, but know that this is a booming sector, and that new players are numerous.
N26
This is veteran neobank. It is a German neobank founded in 2013 in Berlin.
N26 is present in 24 countries (including UK since 2018), has 3.5 million customers and claims a monthly flow of 2 billion euros.
Revolut
Revolut is one of the heavyweights in the sector. Launched in 2015 in the United Kingdom, it claims nearly 2 million accounts in Europe. She has just expanded her business to Singapore and Australia. The co-founder aims for exponential growth with 100 million users within 5 years.
Monzo
Other neo-bank born in the United Kingdom. Monzo has just raised 127 million euros, and has an estimated market valuation of 2.7 billion USD. It is recently ahead its rival Revolut which is capitalized approximately 1.7 billion USD.
Monzo is present in the UK and is preparing to enter the US market.
Monese
Founded in the UK in 2015 by an Estonian expatriate. The bank claims today 1 million customers. The bank allows you to hold an account in the UK from anywhere in Europe.
Starling bank
Created in 2014 by Anne Boden, former director of operations of the Irish bank AIB (Allied Irish Banks), and operational since 2017. She offers banking services to small and medium-sized businesses and a payment terminal to merchants.
Starling Bank claims the creation of 460,000 personal current accounts and 30,000 small business accounts.
Remember the best bank does not exist. There are banks adapted to your needs and others that are not. Play the competition, test the customer service. I also advise you to have at least two businesses bank accounts. This allows you to access a wider range of services.
